Olympic-hit businesses in court move

Scores of small businesses are planning a class action lawsuit against the
organisers of the Olympics over planned road closures and security
restrictions which they claim will put hundreds of jobs at risk.

Around 40 businesses, which employ a combined 550 staff, have committed to a "fighting fund" to tackle the Games organisers.Photo: PA

The group of east London companies, which range from transport firms to printers, cafés, garages and retailers, have united to tackle the London Organising Committee of the Olympic Games (Locog) over restricted access to their premises, the lack of a compensation plan for any adverse impact on trading and the alleged failure to provide relocation packages for the worst affected firms.

Around 40 businesses, which employ a combined 550 staff, have committed to a "fighting fund" to tackle the Games organisers and have instructed a law firm to advise on their options. These include formal mediation or an attempt to secure a judicial review of Locog's stance on firms directly outside the compulsory purchase zone, inside which 193 affected companies were given compensation and new homes.

The group is being led by Graham Phelps, boss of Hackney-based haulage firm Phelps Transport. He said local traders fear the disruption could cripple deliveries and deter customers.

Michael Spinks, managing director of Hackney-based food distributor Essex Flour & Grain Co, said he has put his premises up for sale and is desperately trying to secure a move away after failing to get assurances over access to his £12m turnover business.

He added that he has already lost customers over fears of disruption to their deliveries during the Olympics, which starts on July 27 and ends on August 12, and the Paralympics, which lasts from August 29 until September 9.

Mr Phelps estimated that his own business will be limited to around 30pc of its normal operating capacity. He said there is widespread confusion over exactly how long transport restrictions and general disruption will last, with estimates ranging from six weeks to 13 weeks.

"Most of us are operating on tiny profit margins anyway, so one bad month can spell devastation. We're happy London got the Games but there should have been better communication and a relocation plan for companies like ours."

In some cases there are restrictions on alternative routes which companies fear will mean they will only be able to run deliveries between midnight and 6am.

There are also concerns that night-time drop-offs could be hampered by the policies of individual councils. However, Transport for London (TfL) and local authorities have made a joint statement saying they will be "sympathetic to companies that need to make or receive out-of-hours deliveries".

A separate group of around 30 sole traders is being led by Chris Farrer, who runs a business that helps haulage contractors with licensing.

Mr Farrer, who is calling for 'fall back day rate' compensation for drivers who find they cannot complete deliveries or pick up supplies, said it was "very likely" that his group would join any class action.

"These are guys who fear they won't be able to pay their bills, whether it's mortgage repayments or the higher purchase payments on their equipment."

Mr Phelps said there should have been provision in the £12bn Games budget to help disrupted local traders. "Putting 550 local jobs at risk certainly doesn't fit with the Olympic regeneration plan. We're still willing to talk to Locog, but if they won't, we are happy to go to court."

A London 2012 spokesman said: "We want to ensure the people who live and work in the vicinity of our venues are able to continue going about their business with the minimum of disruption. We are working closely with local authorities and TfL on our plans and liaising with local businesses to talk to them about their plans and requirements."